A Case Study of Red Bull and its Status as a Blue Ocean

The word strategy has its roots from the Greek word ‘strategia’, which means military commander. Webster’s New World Dictionary defines strategy as ‘the science of planning and directing military operations’.
In the 1980s business strategists realized that there was a vast knowledge base in the field of strategy that had barely been examined. It stretched back thousands of years back mainly encompassing military strategy books. So military strategic management dated back to thousands of years, had a major influence on what strategic management is nowadays.

Abstract ................................................................................................... 2
1. Origins of Strategic Management ........................................................... 6
2. Evolution and Historical Development of Strategic Management .............. 8
3. Strategic Management ........................................................................ 10
3.1 Strategic Management Definition .................................................... 10
3.2 The Strategy Hierarchy .................................................................. 10
3.3 Process of Strategic Management ................................................... 11
3.3.1 Mission and Objectives ................................................................ 12
3.3.2 Environmental Scanning .............................................................. 12
3.3.3 Strategy Formulation .................................................................. 13
3.3.5 Evaluation and Control ................................................................ 15
3.4 Deliberate vs. Emergent Strategies ................................................. 16
3.5 Globalization ................................................................................. 17
3.6 Analytical Tools and Frameworks .................................................... 18
3.6.1 SWOT Analysis ........................................................................... 18
3.6.2 PEST Analysis ............................................................................. 21
4. Competitive Strategic Management ...................................................... 22
4.1 Why Compete? .............................................................................. 22
4.2 Porter’s 5 Forces Model .................................................................. 23
4.2.1 The Bargaining Power of Suppliers............................................... 24
4.2.2 Bargaining Power of Buyers ......................................................... 25
4.2.3 Pressure from Substitute Products ............................................... 25
4.2.4 The Threat of New Entrants ........................................................ 26
4.2.5 Intensity of Rivalry Among Existing Competitors ........................... 27
4.3 Innovation as a Key Component in Strategy .................................... 27
5. The Need for Risk Management ........................................................... 30
6. Strategic Risk Management ................................................................. 32
6.1 Scope and Potential for Risks to Influence the Strategy of an Organization ....................................................................................... 32
6.2 Strategic Risk ................................................................................ 33
6.3 Strategic Risk Management Process ................................................ 37
6.3.1 The Need for Being Proactive Not Reactive ................................... 39
6.3.2 Using Scenarios to Respond to Uncertainty .................................. 40
6.3.2.1 Identifying Risks and Opportunities ........................................... 40
6.3.2.2 Assessing Risks to Develop the Likelihood and Impact of Occurrence ......................................................................................... 41
6.3.2.3 Responding to Uncertainty ....................................................... 43
6.4 Risk Appetite ................................................................................. 48
6.5 Risks in Strategy Implementation ................................................... 49
7. Case Study – Red Bull & Red Bull Stratos ............................................. 51
7.1 Red Bull ........................................................................................ 51
7.1.1 How it Started ............................................................................ 51
7.1.2 Red Bull’s Current Position .......................................................... 52
7.1.3 Red Bull Marketing ...................................................................... 53
7.1.4 Red Bull Strategy ........................................................................ 56
7.1.5 SWOT Analysis of Red Bull .......................................................... 57
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7.1.6 PEST Analysis of Red Bull ............................................................ 58
7.2 Red Bull Mission Stratos – Journey to the Edge of Space .................. 58
7.2.1 Mission Description ..................................................................... 58
7.2.2 Benefits of the Project ................................................................ 60
7.2.3 The Jump in Numbers ................................................................. 61
7.2.4 Risks in the Project ..................................................................... 62
7.2.5 Management of the Risks in the Project ....................................... 66
8. Findings and Recommendations .......................................................... 74
8.1 Effect on Social Media .................................................................... 74
8.2 Red Bull – A Blue Ocean ................................................................ 75
9. Conclusion ......................................................................................... 79
References ............................................................................................. 80